Centre Begins Talks On Possible Privatisation Of One Or More Public Sector Banks: Report

In a major move, the central government is said to have begun discussions on privatising one or more public sector banks (PSBs), acting on a proposal made by the nation's apex think tank body NITI Aayog, reports The Economic Times.

Bank of Maharashtra, Indian Overseas Bank and the Punjab & Sind Bank are said to be the three candidates which may be considered for the exercise which could mark a watershed moment for the banking sector in India. It should be noted that all three of the banks have been kept free of any consolidation exercise so far.

The NITI Aayog's proposal is said to have been aimed at avoiding future possibilities of government bailouts of the banks by use of taxpayer money. The proposal thus advises the government to allow "long-term" private capital into the banks.

To further strengthen the banking industry of the nation, NITI Aayog has also advised the Government to allot banking licences to select industrial houses with the caveat that they would not be allowed to lend to group firms.